Source: Yicaixin
Author: Bai Yu
Jiangsu MiG New Materials Co., Ltd. (hereinafter referred to as "MiG New Materials"), which was born in March 2019, specializes in functional carbon-based materials and products, serving national strategic emerging industries such as photovoltaics, semiconductors, and energy storage.
In just a few years since its establishment, MiG has won the favor of dozens of investors, and once swelled from a start-up company whose shareholders could not pay the registered capital to a capital darling with a valuation of 2.6 billion yuan. Under the "stars holding the moon", MiG New Materials applied for the GEM IPO in June 2023 and successfully passed the meeting on January 26 this year.
The reasonableness of the premium merger and acquisition is questionable, and the original planned listing entity was fined
In the process of accepting the review of the Listing Committee, MiG New Materials exposed the entrepreneurial history of the actual controller Chen Xinhua.
According to the prospectus, Chen Xinhua graduated from the School of Engineering of Central South University, majoring in equipment engineering and management, and began to teach at his alma mater for nearly ten years in 1998. From May 2015 to June 2018, Chen Xinhua worked as a manager at Anhui Hongchang New Materials Co., Ltd. (hereinafter referred to as "Anhui Hongchang").
The on-site inquiry of the listing committee meeting pointed out that Chen Xinhua applied for 7 patents as the first inventor during his tenure in Anhui Hongchang, and he was obviously involved in research and development during his tenure, and the rest of the directors, supervisors and senior core personnel of MiG New Materials also worked in Anhui Hongchang.
Anhui Hongchang is engaged in the research and development, manufacturing, sales and service of carbon fiber materials and products, and is the main counterpart of MiG New Materials in China. According to the prospectus, Chen Xinhua started his business during his tenure in Hongchang, Anhui Province, and established Hunan Lecheng New Material Technology Co., Ltd. (hereinafter referred to as "Hunan Lecheng") in 2016.
Hunan Lecheng is engaged in the trading business of carbon-based materials, mainly selling Anhui Hongchang products in the early stage, and began to sell MiG new materials after the establishment of MiG new materials.
According to the prospectus, in 2021, MiG New Materials will gradually transfer the sales functions, personnel and customer resources of Hunan Lecheng to MiG New Materials, and after the transfer is completed at the end of 2021, Hunan Lecheng will no longer conduct business, and when it is closed for nearly a year, in December 2022, MiG New Materials decided to acquire Hunan Lecheng.
At the time of the acquisition, the shareholders of Lecheng New Materials were Chen Xinhua (the actual controller), Chen Ronghua (the brother of the actual controller, deputy general manager in MiG New Materials), and Yang Hui (senior executives in both Lecheng New Materials and MiG New Materials), holding 88.25%, 7.05% and 4.70% of the shares respectively. As of October 31, 2022, audited by Lixin, the net assets of Lecheng New Materials were 1.8484 million yuan, and the net assets of Lecheng New Materials were assessed by Walkerson to be 3.1019 million yuan, with an appraised value of 67.82% higher than the book value. The final purchase price is closer to the appraised value of 3.10 million yuan.
Prior to the acquisition, due to the completion of the above-mentioned transfer, the remaining relevant assets of Hunan Lecheng were mainly notes receivable and vehicles that had not yet matured. Considering that there is little room for appreciation of notes receivable, and the vehicle is an asset that will be impaired, the reasonableness of acquiring Hunan Lecheng at a premium is questionable.
According to the prospectus, in 2022, Hunan Lecheng's operating income will be 663,700 yuan, and the net profit will be 1.1115 million yuan.
During the reporting period (from 2020 to January to June 2023), MiG New Materials carried out a series of asset restructurings under the same control and acquired 4 companies controlled by the actual controller, including the aforementioned Hunan Lecheng.
(Screenshot from the prospectus)
Among them, Hunan Tianya Technology Co., Ltd. (hereinafter referred to as "Hunan Tianya") is in a special situation. In November 2019, Chen Xinhua and Hunan Shenghua Electromechanical Co., Ltd. (hereinafter referred to as "Shenghua Electromechanical") invested 9.40 million yuan (94.00%) and 600,000 yuan (6.00%) respectively to establish Hunan Tianya. According to the prospectus, Hunan Tianya was the original planned listing entity, but after determining MiG New Materials as the listed entity, in December 2021, MiG New Materials acquired Hunan Tianya, which had not yet started operation, on the basis of paid-in capital.
Hunan Tianya is currently a wholly-owned subsidiary and is positioned as a production base in Central China. According to the enterprise investigation, before and after the acquisition, Hunan Tianya successively had overdue individual income tax declaration and stamp duty declaration, and was punished three times with a total fine of 3,200.00 yuan.
(Screenshot from Qichacha)
The paid-in capital of the actual controller after cashing out will be doubled in the short term
In March 2019, when MiG New Materials was established, Chen Xinhua, Yuan Zhiwei and Peng Jianlin invested 69 million yuan, 21 million yuan and 10 million yuan respectively, and the registered capital has not changed for more than two years. The first change in equity structure was in November 2021, when Yuan Zhiwei and Peng Jianlin reduced their capital by 20 million yuan and 10 million yuan respectively.
The reply to the inquiry shows that due to the limited funds of shareholders, only Chen Xinhua has paid 5.88 million yuan among shareholders before the capital reduction in 2021. In 2021, MiG New Materials plans to start the relevant work of listing, and the registered capital needs to be paid in place, and according to the ability and willingness to contribute, the shareholders' meeting will resolve, and Yuan Zhiwei and Peng Jianlin will carry out targeted capital reduction.
Among the shareholders who reduced their capital, Peng Jianlin was registered as a nominee shareholder with the help of a friend, and did not serve in MiG Limited, and still chose to withdraw naturally through capital reduction in 2021 on the premise of knowing that MiG New Materials was preparing for an IPO. Yuan Zhiwei is the cousin of Chen Xinhua, the actual controller, who has served as the executive director and supervisor of MiG New Materials, and now serves as the production supervisor of MiG New Materials' subsidiary, and still subscribes to the registered capital of 1 million yuan after the capital reduction.
According to the prospectus, in December 2021, MiG New Materials implemented the first equity transfer, and the transferor was Chen Xinhua.
Based on the distribution of property within the family and the arrangement of replacing the equity of the listed entity, Chen Xinhua transferred the total registered capital of 6.41 million yuan held by him to his younger brother and sister at a nominal price of 1 yuan/registered capital respectively, as well as Shenghua Electromechanical (a minority shareholder of the original listed entity Hunan Tianya).
Based on the equity incentive arrangement, Chen Xinhua transferred a total of 13.00 million yuan of registered capital held by him to three employee shareholding platforms at 2.10 yuan per registered capital, with a total transfer price of 27.30 million yuan.
After the completion of the above-mentioned transfer, Chen Xinhua subscribed the remaining registered capital of 49.59 million yuan, according to the annual report of Qixin.com Industry and Commerce, at the end of 2021, Chen Xinhua's paid-in capital contribution was 9.47 million yuan, and the paid-in ratio was less than 20.00%.
(Screenshot from MiG New Material's 2021 Industrial and Commercial Annual Report)
In April 2022, MiG New Materials implemented the second equity transfer, and the transferor was also Chen Xinhua, and this transfer made it very fruitful.
Due to the upward valuation of new energy and photovoltaic industry stocks, policy support, expansion of production capacity and business scale and other factors, based on the estimated annual revenue and profit in 2022, the pre-investment valuation of MiG New Materials reached 1.600 billion yuan. Chen Xinhua transferred a total of 4,362,330 yuan of registered capital held by him to 11 external investors at a transfer price of 20.63 yuan per registered capital, and Chen Xinhua cashed out 90 million yuan in this transfer.
After the completion of the above-mentioned equity transfer and the shareholding reform, Chen Xinhua subscribed to the registered capital of MiG New Materials of 45.6407 million yuan. According to the annual report of Qixin.com, Chen Xinhua paid in the registered capital on November 6, 2022, and the source of funds is self-evident.
(Screenshot from MiG New Material's 2022 Industrial and Commercial Annual Report)
It is worth noting that MiG New Materials also implemented a capital increase before the second equity transfer, and the valuation and registered capital price in the short term are quite different.
In January 2022, the registered capital of MiG New Materials increased from 70 million yuan to 77,552,632 yuan, which was subscribed by 5 external investors at a price of 10.86 yuan / registered capital, and the pricing was based on the pre-investment valuation of 760 million yuan based on the half-year operation in 2021 and the expected profit for the whole year of 2022. This is more than double the price at which Chen Xinhua transferred shares to 11 external investors during the second equity transfer of MiG New Materials in April 2022.
In the second equity transfer of MiG New Materials, the new shareholders who transferred Chen Xinhua's shares also included Minsheng Securities Investment Co., Ltd., a wholly-owned subsidiary of Minsheng Securities, the sponsor, and Minsheng Securities' "direct investment + sponsorship" income was greater.
Since the time for external investors to invest in shares is mainly in 2022, compared with the previous year, the asset account of MiG New Materials has changed greatly. At the end of 2021 and the end of 2022, the capital reserve of MiG New Materials was 28.409 million yuan and 682.5136 million yuan, an increase of 2,302.46%. At the end of 2021 and the end of 2022, the consolidated asset-liability ratio of MiG New Materials was 65.94% and 23.14% respectively, a drop of 42 percentage points. At the end of 2021 and the end of 2022, the balance of monetary funds on the account of MiG New Materials was 19.5466 million yuan and 248.5588 million yuan respectively.
In this IPO, MiG New Materials plans to raise 501.7698 million yuan, of which 10000.00 yuan will be used to supplement working capital.
MiG new materials in just a few years of the rise of the speed of astonishment, or become another example of capital wealth, when the tide recedes whether it can withstand the test of the market, "Yicaixin" also pay attention to its follow-up development.